Redundancy

When a client receives a redundancy payment, it can be difficult to determine what counts as income (and therefore subject to a contribution) and what vests in the trustee as ‘acquirenda’ (see here). The AiB guidance helps clarify this for advisers:

•statutory pay in lieu of notice (PILON): income;
•enhanced or voluntary PILON: acquirenda vested in the trustee;
•statutory redundancy pay: income;
•enhanced or voluntary redundancy pay: acquirenda vested in the trustee;
•other ex-gratia payments: acquirenda vested in the trustee.

Once a client has received their statutory redundancy payment, the trustee should consider whether a contribution or increased contribution should be sought.

Where this occurs, or is likely to occur, seek guidance from the AiB before making an application.